June’s prices rose high, fast

Wholesale prices rose at their highest rate in 27 years, the report said.

WASHINGTON (AP) — Prices for a quart of milk, a plane ticket and a host of other products rose in June at nearly the fastest pace in a generation — yet another economic shock wave that alarmed analysts and took a bite out of the buying power of Americans.

Consumer prices rose 1.1 percent in June from the month before, far faster than the expected rate of 0.7 percent and almost double the reading from May, the Labor Department said Wednesday.

The only time in the past quarter-century that monthly inflation has been that high was in September 2005, when prices jumped 1.3 percent, mostly because Hurricane Katrina shut down oil refineries and energy prices spiked.

Consumer prices are up 5 percent over the last 12 months, the fastest one-year change since 1991.

As prices rose last month, take-home pay took a hit. Adjusting for inflation, weekly wages fell 0.9 percent in June, the third straight monthly decline and the biggest drop in almost four years.

The news was the back half of a one-two punch on inflation. On Tuesday, the Labor Department reported that prices at the wholesale level were rising by the highest annual rate in 27 years.

Before Congress, Federal Reserve Chairman Ben Bernanke wrapped up two days of testimony and repeated his concerns about inflation, also noting the housing slump, financial turmoil and credit troubles.

“We will work our way through these financial storms,” he said.

The Consumer Price Index, which came out Wednesday, measures not just what Americans pay for goods but for other purchases, including services like health care and haircuts.

Higher energy costs led the way, with a more than 10 percent rise in gasoline prices. More expensive vegetables, dairy and beef pushed up food costs.

Core inflation, the figure that excludes energy and food to measure other costs, rose by 0.3 percent in June, the fastest rise since January. Airline tickets grew almost 5 percent more expensive, the biggest rise since the summer of 2001.

The report illustrates just how quickly prices are rising — not that the economic squeeze is anything new to most Americans.

Marsha Marvel, 45, an elementary school reading specialist from Springfield, Ill., said she had created a weekly household budget to hold down expenses and the family was cutting back on trips and restaurant meals to save.

“This summer, I feel like I’m paying $10 into my gas tank every day, so we’ve really had to change our budget,” she said. “We’re just watching our money so much more closely than before.”

Carla Civitate, 50, a Des Moines, Iowa, hairstylist, said she and her husband were also struggling with the soaring gas prices.